US Data Center Construction Spending Hits Record $85B Pace as Office Real Estate Collapses

Private data center construction spending is surging at a record $84.95B annual pace, marking a 73% year-over-year increase according to August Census Bureau data. Data centers now constitute roughly 63% of all private office construction, a massive jump from 47% just one year earlier. The $39.1B spending gap between data centers and general office construction—which dropped 9.7% YoY to $45.8B—is the widest since the Census began tracking the series in 2014. The official Census figures explicitly exclude the value of the racks and servers housed inside these buildings, meaning total capital expenditure for the tech industry is drastically higher than reported. Power infrastructure construction grew 9.7% YoY, heavily driven by the escalating electricity requirements of these new hardware facilities. "July's nonresidential gain was entirely due to data centers." — Anirban Basu